EMERGING GIANTS
Defining the trend: How increasing investment from Asia and the Middle East is turning them into sport’s Emerging Giants
CONTENTS 03 I INTRODUCTION
04 I THE MIDDLE EAST The Middle East & Europe - Investing in sponsorship Raising the stakes: The emergence of Qatar sees it competing with the UAE as the Middle East’s sporting superpower
08 I ASIA Asian & the US - Sponsorship investment Asian & the US - Team ownership 12 I DEFINING THE TREND The Key drivers 15 I CONCLUSION What does this all mean for rights holders and brands?
*All monetary values are in US Dollars. Conversion rates (December 2014): 1€ = $1.25
INTRODUCTION Investment from the Middle East and Asia into sport in Europe and the US continues to grow significantly. It is a trend mirrored by the two regions’ international investments. Since 2007, the Qatar Investment Authority has injected over $65 billion into Europe whilst in 2013, Chinese funding of US businesses amounted to $12.2 billion, a massive 51.7% increase on the previous year.
As both European football and US sports franchises continue to grow in popularity and reach, so too do the returns they deliver for their international investors. The Middle East and Asia are emerging as global giants in sports sponsorship and ownership and this trend shows little signs of slowing – and given this, both domestic and international brands and rights holders should understand the drivers of this trend in order to capitalise on it commercially.
The popularity of football’s European clubs is increasingly attracting sponsorship and media rights deals from the Middle East, whilst US sport franchises are being targeted by Asian investment.
Assets of sovereign wealth funds by region
Interest in sport
2.2
» O bserving the investments of sovereign wealth funds, Asian and Middle East state-run investments account for the lion’s share of 76.2% in 2014. » Increasing investments from Asia and the Middle East in the USA and Europe since 2007.
BILLION
PEOPLE ARE INTERESTED IN SPORT globally
1.6
BILLION
76.2%
OF THE GLOBAL INVESTMENT COMES FROM ASIA & MIDDLE EAST
PEOPLE ARE INTERESTED IN FOOTBALL The potential audience reach through sport alone is almost a third of the world’s population, with 2.2 billion people interested in sport today. Broken down further, there are 1.6 billion football fans globally, 1.2 billion people who are interested in basketball and over a 151 million people are interested in American football. This interest in sport illustrates why so many use it as a unique vehicle for communicating to an engaged audience.
1.2
$2,500
BILLION
PEOPLE ARE INTERESTED IN BASKETBALL
151
MILLION
BILLION
GLOBAL INVESTMENTS
$2,700
BILLION
PEOPLE ARE INTERESTED IN AMERICAN FOOTBALL Middle East Asia Africa
Source: Repucom Sports DNA 2014, May Base: 1000 respondents aged between 16-69 across 24 countries (including AR, AU, BR, CA, CN, DK, FR, DE, IN, ID, IT, JP, MY, MX, PL, RU, SG, KR, ES, TR, AE, UK, US and VE) who said they were ‘interested’ or ‘very interested’ in sport or the selected sport.
37% 39% 2%
Source: Sovereign Wealth Fund Institute as of October 2014
Other Europe Americas
2% 17% 3%
THE MIDDLE
EAST
5 The Middle East
THE MIDDLE EAST AND EUROPE – INVESTING IN SPONSORSHIP Middle Eastern brands have invested heavily in the sponsorship of football in recent years with 20 of the largest European clubs now being sponsored by Middle East Airlines. The list includes Barcelona (Qatar Airways), Real Madrid, Paris Saint-Germain, Arsenal, AC Milan (all sponsored by UAE-owned Emirates) and Manchester City (Etihad, also in the UAE). The United Arab Emirates has emerged as the biggest single investor in the sponsorship of European team football shirts. The UAE’s investment was actually non-existent less than ten years ago. It has now surpassed Germany at the top of the sponsorship investment table. In 2014, UAE companies, led by Emirates and Etihad, invested $163 million in shirt sponsorship alone. Whilst the UAE ranks number one in the volume of spending, Qatar is the nation with the highest average fee spent per deal into the European football industry ($49.1 million).
This investment of Middle Eastern Airlines into European football has altered the dominance of traditional sponsoring industries. Gambling, for example, has slipped down from fifth position among the biggest sources of investment to tenth place. When looking at shirt sponsorship deals in the top six European football leagues over the last ten years, Middle Eastern companies have increased their overall share by 26%. Investment from the Middle East now accounts for 18% of the total sponsorship spend into these leagues. As recently as the 2009/10 season, shirt sponsorship by Middle Eastern companies was only worth around $24.6 million. By 2013/14, it was six times greater. Of the top five biggest football sponsoring brands in Europe, three are now Middle Eastern companies - the Qatar Tourism Authority, Emirates and Etihad.
Countries investing in the top six European football leagues
TOP SIX INVESTING COUNTRIES IN SHIRT SPONSORSHIP IN THE TOP SIX EUROPEAN FOOTBALL LEAGUES (2005-2015) 180
Million us Dollar
160
UAE DE US UK IT Qa
140 120 100 80 60 40 20 0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
1,000
DE
UK
IT
UAE
NL
FR
US
KR
ES
14 1M
200 0
25 9M
400
17 7M
34 8M
total in us Dollar 38 2M
600
44 0M
48 1M
800
46 0M
69 1M
Million us Dollar
1,400 1,200
1,0 17 M
Total investment of the top ten investing countries in Shirt sponsorship in the top six European Football Leagues (2005-2015)
RU
Source: Repucom Market Intelligence 2014
Insights by Repucom
6 The Middle East
RAISING THE STAKES: THE EMERGENCE OF QATAR SEES IT COMPETING WITH THE UAE AS THE MIDDLE EAST’S SPORTING SUPERPOWER Qatar in particular has been at the forefront of the emergence of the Middle East as a major power in sport. Qatar Sports Investment’s buyout of Paris Saint -Germain in 2012 was a huge but not isolated event – for example Malaga CF is also 100% Qatari owned, and Qatar’s relationship with Barcelona has put this nation right at the heart of global football. Of course the 2022 World Cup is a hugely significant endeavour for both Qatar and the region as a whole, but Al Jazeera’s investment in Sports TV rights and BeIN Sports over the last five years has transformed them into a major power in the distribution of sports content globally as well. Perhaps the flagship of sports development in the Middle East is Qatar’s Aspire Zone - an award winning sports and healthy lifestyle hub, which during the last couple of years has become one of the world’s most attractive sports destinations. This includes hosting major sports events, training and pre-competition camps, global sports conferences, groundbreaking research on the future of world sport, as well as world-leading sports medicine and rehabilitation.
Through adopting a premier sport education programme and a holistic approach to athlete development, Aspire transforms young sports talent into the future generation of champions. For elite athletes, Aspire works with leading sports medicine practitioners and innovative technologies to develop a truly multidisciplinary approach to diagnosis, treatment and management of injuries, enhancing athlete health and well-being. And for the general public of the region Aspire provides access to a variety of sports and activities, including fitness programmes, sports tournaments, marathons and walks, outdoor gym facilities, running tracks, green parks and family healthy activities. Overall, Aspire Zone is a world class destination for sports excellence boasting some of the world’s finest sport stadia and venues and offering unparalleled opportunities and integrated services under one roof.
Al Jazeera increases investments in sports tv rights
BeIN Sports: » Fully owned by Al Jazeera Media Network » Launched in France (2012), USA (2012) and various Pacific Asian countries (2013) » Channels in Australia, Thailand and Taiwan to be launched in 2014 » Approximately 1.5 million subscribers in France
2012 Launch of pay TV channel BeIN Sports in France.
BEIN
SPORTS
2013 Al Jazeera Sports buys Premier League TV rights for Middle East.
PREMIER LEAGUE
“Al Jazeera Sports is not considered a global channel today compared to the other sports channels. It’s trying to become a global player, a global sports channel.” Thomas Kuruvilla, Director at Arthur D. Little Business Group
2014 BeIN Sports secured the broadcast rights to Formula One in the Middle East and North Africa. The deal lasts until 2019.
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ONE
Secured the rights to broadcast the UEFA Champions League and UEFA Europa League in Indonesia, Thailand, Laos and Cambodia. The deal lasts through to 2018 and includes live broadcasts and highlights packages.
UEFA Source: Repucom Market Intelligence 2014
FORMULA
CHAMPIONS LEAGUE EUROPA LEAGUE
7 The Middle East
Surge in ownership investment from the Middle East into European football
$1.5
BILLION
TOTAL OWNERSHIP INVESTMENT
in the Europe*
“We continue to see owners from the region investing significantly in both the playing staff as well as the longer term infrastructure of their clubs.” Alexander Thorpe, Consultant, Sport Business Group at Deloitte
Leeds United FC Bahrain Gulf Finance House, 100% for US $84 million (since 2012 )
Manchester City FC United Arab emirates Abu Dhabi Holdings, 90% for US $330 million (2008), (Mansour bin Zayed Al Nahyan)
Nottingham Forest FC Kuwait Fawaz Al-Hasawi 100% (2012*)
Arsenal FC Iran Red & White Holdings, 29.72% for US $250 million (2007), (50% owned by Farhad Moshiri)
Paris Saint-Germain Qatar Qatar Sports Investments, 100% for US $130 million (2011)
TSV 1860 München Jordan Hasan Ismaik, 49% for US $25 million (2011)
Málaga CF Qatar Source: Repucom Market Intelligence 2014 *Source: Deloitte’s Sports Business Group
Abdullah bin Nasser Al Thani, 100% for US $30.45 million (2010)
Insights by Repucom
Repucom is a leading global marketing research company providing data, insights and intelligence to clients in every area of sports marketing, sports media and sponsorship. We understand the DNA of sports fans - what they hear and see, how they react and how their behaviour changes over time. This knowledge is at the heart of making great marketing and sponsorship decisions in a crowded and increasingly costly market. Repucom has 1,400 employees in over 20 offices around the world.
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